Comments
are being accepted through March 24 on an Idaho Power Company application for
state regulators to accept or reject sales agreements with two wind projects in
the near Lynn, Utah.

The
developer of the projects, Brett Woodward of Wasatch Wind Intermountain, LLC, seeks
a 20-year agreement for each project with a targeted operation date of Dec. 31,
2013. The agreements state that each project, Grouse Creek Wind Park and Grouse
Wind Park II, would deliver up to 10 average megawatts monthly to Idaho Power
and that the developers would be paid by Idaho Power at a rate that is
published by the Idaho Public Utilities Commission.

However,
the applications for the projects were submitted to the commission after the Dec.
14, 2010, effective date of a commission order that reduced the eligibility cap
on the size of wind and solar projects that can qualify for the commission’s
published rate from 10-megawatts to 100 kilowatts.

The
temporary reduction in the eligibility cap came after Idaho’s three major
investor-owned electric utilities said the rapid development of large wind projects
that are broken up into smaller 10-MW projects in order to qualify for the published
rate is circumventing utility planning process and creating system reliability
and operational issues. Idaho Power further claims that the “continuing and
unchecked requirement” for the utility to acquire additional intermittent
generation regardless of its need for additional energy “increases the price
its customers must pay for their energy needs.”

Despite
those concerns, Idaho Power states it is complying with its federal mandate under
the Public Utility Regulatory Policies Act (PURPA) to accept power generated
from qualifying renewable facilities. (The
commission’s reduction in the eligibility cap does not waive regulated
utilities’ PURPA requirement to buy energy from wind and solar projects up to
80 MW, but the rate paid to the projects between 100 kW and 80 MW is negotiated
between the utility and the developer using the published rate as a starting
point for negotiation.For now, projects
under 100 kW qualify for the posted rate.)

PURPA
was passed by Congress in 1978 to encourage development of renewable energy
technologies as alternatives to burning fossil fuels or building new power
plants. The act requires that electric utilities offer to buy power produced
from qualifying small-power producers at rates determined by the states. The
rate to be paid small-power developers, called an avoided-cost rate, is to be
equal to the cost the utility avoids if it would have had to generate the power
itself or purchase it from another source.

The
commission must ensure the avoided-cost rate is reasonable for utility
customers because 100 percent of the price utilities pay to qualifying
producers is included in customer rates.

The
rate proposed for the projects is a non-levelized
rate that increases through the life of the contract. In 2014, the agreement’s
proposed rate for normal load hours during normal seasons of the year is $65.44
per megawatt-hour, escalating to $125.89 per MWh in
2033. The rate varies to account for heavy and light load hours of the day and
heavy and light load seasons of the year.

To
address some of Idaho Power’s concerns, the agreements state that Idaho Power
can curtail generation from the projects without compensation to the developer
under certain conditions. Those conditions include times when generation on
Idaho Power’s total system approaches minimum levels needed to serve customers
and further acceptance of the wind would have a detrimental effect on the utility’s
ability to simultaneously manage the generation also coming from thermal, hydro
and other resources.

The
agreements also state that it is up to the wind developer to work with Idaho
Power’s business delivery unit to ensure that interconnection facilities and
transmission upgrades are completed in time to meet the projects’ scheduled
operation date. If the projects fail to meet their delivery dates, delay
damages will be assessed.

Comments are
accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on
"Comments & Questions About a Case." Fill in the case numbers
(IPC-E-10-59 or -60) and enter your comments. Comments can also be mailed to
P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.

A
full text of the commission’s orders, along with other documents related to
these cases, is available on the commission’s Web site. Click on “File Room”
and then on “Electric Cases” and scroll down to any of the above case numbers.